RWE, Europe’s Biggest Emitter, Cancels BlueNext Membership

Jan. 23 (Bloomberg) -- RWE AG, Europe’s biggest emitter of
greenhouse gases, canceled its membership in the BlueNext SA
spot carbon market as the region is set to decide this year
which exchanges will help sell billions euros of allowances.

“RWE Supply & Trading has canceled the membership in the
BlueNext exchange because its current design does not offer
enough incentive,” Barbara Minderjahn, an RWE spokeswoman in
Essen, Germany, said today by e-mail. The cancellation will take
effect early next month, she said. “The balance between efforts
on one side and benefits on the other side is negative.”

BlueNext, the emissions exchange majority-owned by NYSE
Euronext, settled a value-added tax liability with French
authorities for 31.8 million euros ($41 million) on Dec. 22. The
exchange handled 83 percent less of its main European Union spot
contract last year. Volumes fell to 45.3 million metric tons
from 269.9 million in 2010 and 1.1 billion in 2009. Prices fell
51 percent in the past year and closed at 6.87 euros a ton today
in Paris, down 2.3 percent.

The membership list is still growing, “with major
companies recognizing BlueNext as a leader in the carbon
market,” Philippe Chauvancy, commercial director of the Paris
bourse, said by e-mail. Six members including Air France-KLM
Group joined this year, Chauvancy said Jan. 18. “If RWE changes
its mind, they are welcome to keep their membership.”

The EU plans this or next month to open a tender for a
transitional platform to carry out sales of carbon allowances
for airlines and so-called “early auctions” of post-2012
permits for manufacturers and power plants.

EU Tender

This year, the EU carbon market is starting to sell most
allowances to power utilities rather than give them away for
free. Monthly supply to the carbon market via government
auctions will reach 90 million metric tons a month by next year,
from 10 million tons a month on average in the four years
through 2011, Bloomberg New Energy Finance estimated in a Jan.
20 research report.

The timing of the tender will keep the 27-nation bloc on
track to start early auctions of allowances for the next phase
of the EU emissions trading system in the second half of this
year, the European Commission, the bloc’s regulatory arm, said
Jan. 11 in response to Bloomberg questions. Germany, the U.K.
and Poland also are holding separate tenders for their own
national auction platforms after they opted out of an EU-wide
system of sales.

BlueNext Safe Zone

BlueNext, an exchange for environmental-related products,
is owned by NYSE and Caisse des Depots et Consignations. The
Paris-based company was told on July 1 by the French government
that it faces a tax liability of 355 million euros. The notice
followed an audit covering 2006 to 2009 related to alleged tax
frauds by participants on a market operated by BlueNext,
according to NYSE in a July filing.

In May, BlueNext introduced a so-called safe zone,
requiring traders to verify that allowances can be traced to
source after fraud and theft in the market. Members were forced
to allow access by the exchange to their carbon accounts.